Economists as Experts: Overconfidence in Theory and Practice

Journal of Economic Methodology 13(1):1–24

38 Pages Posted: 24 Jan 2006 Last revised: 25 Nov 2015

See all articles by Erik Angner

Erik Angner

Department of Philosophy, Stockholm University; Institute for Futures Studies; Interdisciplinary Center for Economic Science

Date Written: 2006

Abstract

Drawing on research in the psychology of judgment and decision making, I argue that individual economists acting as experts in matters of public policy are likely to be victims of significant overconfidence. The case is based on the pervasiveness of the phenomenon, the nature of the task facing economists-as-experts, and the character of the institutional constraints under which they operate. Moreover, I argue that economist overconfidence can have dramatic consequences. Finally, I explore how the negative consequences of overconfidence can be mitigated, and how the phenomenon can be reduced or eliminated. As a case study, I discuss the involvement of Western experts in post-communist Russian economic reforms.

Keywords: overconfidence, calibration, economists, experts, public policy, Russian reforms

JEL Classification: A11, H00, O00, P20

Suggested Citation

Angner, Erik, Economists as Experts: Overconfidence in Theory and Practice (2006). Journal of Economic Methodology 13(1):1–24. Available at SSRN: https://ssrn.com/abstract=877205

Erik Angner (Contact Author)

Department of Philosophy, Stockholm University ( email )

Universitetsvägen 10 D
Frescati
Stockholm, 106 91
Sweden

HOME PAGE: http://erikangner.com

Institute for Futures Studies ( email )

Holländargatan 13
Stockholm, SE-101 31
Sweden

HOME PAGE: http://www.iffs.se/en/research/affiliated-researchers/erik-angner-1/

Interdisciplinary Center for Economic Science ( email )

400P Truland Building
George Mason University
Fairfax, VA 22030
United States

HOME PAGE: http://ices.gmu.edu/people/affiliated-faculty

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